Price - is the exchange value of the goods (services), expressed in monetary terms.It is formed under the influence of two economic phenomena: supply and demand.With a large volume of goods in the market and low purchasing power price is set low.Conversely, the combination of high demand deficiency leads to an increase in product cost.
how various factors can affect the supply and purchasing power?And as this is governed by the pricing policy of the company?For example, consider a company that produces coffee.Because of strong frosts killed most of the crop.The market situation is formed - lack of coffee.The company to increase its profits, starts to raise the level of prices.Buyers who are not able to buy coffee at a price of selected alternative product (tea, chicory, etc.).Similarly in the market to establish new amounts of supply and demand, the equilibrium price will rise at the same time.The reason for such a reaction is the limited customer funds.Therefore, people are trying to buy alternative products low cost.However, they satisfy the needs of their greater volume than if bought coffee.
pricing policy in marketing - one of the most important tools to achieve corporate goals.She performs for the company has three main functions:
1. Determines sales.How many people will be willing and able to buy goods with the data consumer properties.At a lower cost will be higher than sales.
2. Identifies specific profit per unit of product.The higher the price, the greater the profit will receive the manufacturer.
3. Supports other marketing tools.The pricing policy is not the only determinant of profit.On the income effect, for example, the number of outlets.In this case, the sales volume increased.But a large number of shops also leads to an increase in costs, and they reduce the amount of net profit.
pricing policy should be consistent with the objectives that the company wants to achieve.They are usually associated with obtaining a certain amount of profit, sales.The aim of the company may also be a survival of the market, the victory over the competition, the establishment of a certain image, etc.
company can generate price, hoping to get some profit in the short or long term.When the company plans to increase the income for the period more than 1 year, it is necessary to set an additional target for a short period of time (month, quarter, etc.).
pricing policy of the company can be formed taking into account the increase in sales volume.But it is necessary to consider that in this case it is necessary to reduce unit costs and to produce a unit of output.Sales growth implies an increase in market share, win the competition and getting a high return in the long term.
pricing policy, corresponds to the position of survival, set in the period of acute competition.The company in this case has a large inventory of products, high capacity and small sales.The aim of the company is becoming an increase in sales, to get income from finished products stored in the warehouse.
Thus, the pricing policy is completely dependent on the goals it wants to achieve in the end.Increasing profits is due to the price increase, and the survival and sales growth - by lowering the cost.
Buyers of each company develops a particular image - image.It depends on what kind of cost and quality of the goods it sells, as well as courteous and competent people working for it.